Deutsche Bank announced on Wednesday a third-quarter net profit of 1.031 billion euros ($1.06 billion), slightly surpassing expectations despite an 8% decline compared to the previous year and persistent struggles in the investment unit.
According to LSEG data, analysts had anticipated a quarterly net profit attributable to shareholders of 997 million euros.
Although there was a year-on-year decrease, the net profit was 35% higher than the preceding quarter. This marked the thirteenth consecutive profitable quarter for Deutsche Bank following its significant restructuring in 2019.
In the corresponding period of 2022, the German bank had achieved a net profit of 1.115 billion euros, driven by increased interest rates and heightened market volatility, which bolstered its fixed income and currency trading business.
The corporate banking division performed strongly, benefiting from the higher interest rate environment, with revenues rising by 21% year-on-year to 1.89 billion euros.
However, the investment arm experienced a slowdown, with net revenues falling by 4% compared to the previous year, amounting to 2.27 billion euros. Over the first nine months of the year, the revenues were down by 12%, totaling 7.3 billion euros.
During an interview with CNBC’s Silvia Amaro, Deutsche Bank CFO James von Moltke remarked that the investment banking unit’s performance was “largely in line with the market” on an underlying basis. He attributed the changes in the fixed income and currency revenues to a normalization process, particularly in the macro businesses such as rates, foreign exchange, and emerging markets, which had benefited from substantial volatility the previous year.
Von Moltke highlighted a shift in the bank’s focus towards other products, notably credit and financing, which demonstrated strength.
Deutsche Bank anticipated revenues of approximately 29 billion euros for the full year, aligning with the higher end of previous estimates. It also declared the possibility of freeing up an additional 3 billion euros in capital and planned to enhance and expedite shareholder distributions.
In a statement, Deutsche Bank CEO Christian Sewing emphasized the material enhancement of their capital outlook owing to robust results and targeted capital efficiency measures.
Despite these positive developments, the bank continues to face multiple challenges, including a deteriorating European business environment, macroeconomic uncertainties, and IT complications within two of its retail units.
Deutsche Bank shares have experienced a decline of roughly 13% year-to-date.
